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Portfolio Update – August 2019 – Let your money work for you

Welcome back!

This post is written far too late, in my own opinion, and I would have expected it to be posted about two weeks ago. But, I am sure you are familiar with the concept of daily life and its habit to sometimes get in the way. With this portfolio, I am working on my journey towards financial freedom, but I am not at my goal yet, and my work is, albeit it very interesting, also demanding.

Unless I have already written about it in the past, I work at a Nordic bank with syndicated loans, for which the short explanation is “so big loans to corporates and companies, that you need multiple banks to finance them”. Basically, when you have two or more lenders to one borrower (with loans most commonly starting at €100 million and upwards), I am working with representing the group of lenders as their joint voice towards the borrower. Maybe it is more exciting in real life than it sounds, but it keep me happy.

Speaking of work, that is also what I wanted to discuss today before going into the monthly update. Today, most people work for money, and that is why they are not rich. Instead, you should make your money work for you by investing it. That way, your money will bring you more money, and you are on your way towards financial freedom. I think that this may be a quote from Robert Kiyosaki (my memory fails me this minute of writing). Regardless, I am sure you were already aware of that concept as you are interested in investing (I’d assume that is why you are here on my blog).

As for my portfolio, this month I have been forced to let my already done investments do all the work for me, and I have not been able to contribute with my muscles. I have a tax debt of a couple of thousand euro, which needs to be settled in November, so I will have to focus on that currently. But I am happy that I have been able to contribute to the portfolio early on this year, to have the funds work for me.

And having prioritized this way, i.e. first paying myself and the tax man later, it keeps me more motivated to keep working to create more wealth. That is because the tax authorities will be in a worse mood than I if they don’t get paid, so I will keep working on my side hustles to find more funds. I think that this is a Robert Kiyosaki quote as well, am I right?

Let’s move onto how my All Seasons Portfolio is performing.

Gold is king when equities strike out in rocky August

The gold mania has continued in August after the rally during the summer. By the end of August, the gold in my portfolio is up about 16% from my acquisition price in only five months (from March). That is insane. But, other parts of the portfolio have not performed that well, and to be honest, that is the beautiful function of the All Seasons Portfolio. It keeps growth stable, by countering losses in some ares with gains in others.

Talking about allocations and splits, they are more or less the same as in July, with only small changes as I didn’t add any new funds. Gold and TIPS have each grown by one percentage point, while stocks and commodities decreased the corresponding amount.

If we dig down more into the numbers, you can see the changes more clearly with this graph. You see that the total portfolio value us more or less the same (this will be more evident when I present the table further down in this post).

Imagine if I would only have had a portfolio which was 100% equity, which is extremely common among retail investors. Ouch! That part of the portfolio is down 6% in just a month. Instead, I have retained my wealth by diversification, and over time, my portfolio is growing in a healthy pace without the hefty bumps along the way.

So, if you look at the table here below, you will see what ETFs I actually own. If you feel inspired, you can find them by searching with the ISIN which is an individual identifier for each stock traded asset. However, my portfolio is no investment advise, only inspiration and me being very transparent of what I own.

AssetCategoryISINJuly 31, 2019August 30, 2019Monthly change
iShares $ TIPS UCITS ETF USD (Acc) (EUR)TIPSIE00B1FZSC47387.98€403.8€+4.08%
Vanguard EUR Corporate Bond UCITS ETFCorporate BondsIE00BZ163G84380.52€368.48€-3.16%
iShares € Govt Bond 3-5yr UCITS ETF EUR (Dist)Govt Bond MidIE00B1FZS681174.54€175.78€+0.71%
iShares J.P. Morgan EM Local Govt Bond UCITS ETF USD (Dist) (EUR)Govt Bond LongIE00B5M4WH52381.92€374.64€-1.91%
iShares $ Treasury Bond 7-10yr UCITS ETF USD (Dist) (EUR)Govt Bond LongIE00B1FZS798363.1€381.98€+5.2%
Invesco Bloomberg Commodity UCITS ETF (EUR)CommoditiesIE00BD6FTQ80331.96€321.07€-3.28%
Xtrackers Physical Gold ETCGoldGB00B5840F36465.49€493.63€+6.05%
SPDR® MSCI Europe Small Cap Value Weighted UCITS ETF EUR AccEquityIE00BSPLC298166.15€164.1€-1.23%
SPDR® MSCI USA Small Cap Value Weighted UCITS ETF USD AccEquityIE00BSPLC413461.86€431.76€-6.52%

To summarize, it is enjoyable to see how well this portfolio management strategy actually works. To be honest, I didn’t think it would be this effective when I started out, but even in tough times on the markets, the portfolio is working well. No big dips, and steady growth over time. This little experiment of mine to start blogging about my progress is paying off in terms of learning (not making anything on the blog in terms of money though).

Looking forward to start contributing again to the portfolio, but I fear it will have to grow without my help for the next months, until my taxes are paid. I feel a bit blue about that but that is what the world looks like. I’ll be back in the game in no time and I will be back in just a few weeks for the next portfolio update, that time for September. I will try to post sooner after end of the month, I promise.

Happy investing and take care,

This Post Has 2 Comments

  1. Chung

    Thank you for posting this. I am thinking of starting in Jan 200 with the same portfolio. This has been very interesting!

    1. Nicholas

      Hey, happy to hear you’re interested in the All Seasons Portfolio. Keep checking in here on the blog occasionally for monthly updates until and when you are up and running!

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